Word comes today that Barack Obama will nominate Federal Reserve Vice Chair Janet Yellen to be Ben Bernanke's successor as chair of the Federal Reserve. She'll be the first woman to hold the job, and in fact the first woman to chair any major western central bank. Way back on April 2, I thought this was the inevitable choice:
Who is Janet Yellen? She's currently the vice chair of the Federal Reserve. Before that she was president of the San Francisco Federal Reserve. She's a Democrat. For the past decade, she's been a monetary policy "dove." She was an advocate for the Evans Rule on the Federal Open Market Committee. She's familiar with the importance of nominal income expectations. In other words, a good choice on the merits as well as the obvious choice in terms of credentials and a historic choice in terms of gender. For a president with no particular interest in pushing the envelop on monetary policy, it's a no-brainer.
Yellen is clearly the best-qualified person for the job, and she has the exact right mix of "is a Democrat" and "is not a Democratic Party operative" to be a Democratic president's nominee.
Obviously there was that whole Larry Summers detour. But this is a much better idea.